The productive sectors are pointing out the negative effects of the planned increase from 13% to 15% in Value Added Tax, and insist on the need to resolve the fiscal problem by cutting state spending.
According to representatives of the productive sector, an increase in Value Added Tax (VAT) will have a negative effect on the economy. For the food industry, the 15% rise could result in the closure of production plants and an increase in informality among businesses.
The loss of competitiveness facing the food industry is the reason that exports have fallen from $1,124 million in the first ten months of 2013, to $1,051 million in the same period in 2014.
High interest rates, higher inflation, credit constraint in production, lower growth and a sharp reduction in sales are some of the problems facing the food sector which reported a decline of 6.5% in foreign sales.
The Costa Rican Chamber of the Food Industry has affirmed that problems and delays in the registration process have temporarily been resolved.
Representatives from the food industry (Cacia) point out that since the Ministry of Health implemented a temporary measure which allows records to be filed via an affidavit, the formalities are being completed in a week.
There are concerns related to lack of definition in key areas and the Solis administration's true implementation capacity is being questioned.
The guild of private companies has also criticized the fact that they were not included in the development of the employment strategy to be presented in the next few days by President Solis.
For example, on the subject of electricity tariffs, Mario Montero, vice president of the Costa Rican Chamber of the Food Industry (Cacia), told Crhoy.com that "... 'there are now too many diagnoses and there are issues where political calculations should be left out of the picture, and the industry wants to participate in working groups' ... 'inaction is choking us and postponing decisions for 18 or 24 months is not acceptable.' "
The Costa Rican Chamber of the Food Industry has reiterated the existence of problems in importing, exporting or launching new products, and with the financial controls at points of sale.
Managers of the business association pointed to "... lack of vision and political will in some public institutions such as the Ministry of Health."
Businessmen in Costa Rica attribute the outflow of $31 million in the first quarter of the year to the close down of operations of businesses in the sector who have decided to move to neighboring countries.
The outflow of capital from the manufacturing industry during the first three months of this year is $7 million more than left the country in the same period in 2009, during the economic crisis in the United States, according to detailed figures from the Central Bank of Costa Rica.
The state run electricity company intends to archive projects in the energy reform sector, while the commission presided over by president Solis is going to take 18 months, just to discuss the country's energy matrix.
After the Solis government having announced the creation of a commission that will take a year and a half just to diagnose the problems of the energy sector in the country, the Instituto Costarricense de Electricidad has made a request for three projects on law reforms being studied in the Legislature, to be archived while the commission seeks these solutions.
Businessmen from various sectors are complaining about lack of consensus and lack of information given to the private sector on the proposed elimination of tax breaks which the government is promoting.
More haste in implementing concrete measures to control the fiscal deficit and less analysis is recommended by many entrepreneurs in productive sectors, who also opposed a proposal to remove 200 tax breaks without being consulted on the implications for competitiveness of enterprises.
Foreign sales in the first four months of the year totaled $467 million, below the $543 million generated from sales abroad in the same period in 2013.
The cost of electricity, changes in the exchange rate, the price of raw materials and competition from informal firms are part of the factors that explain part of the drop in foreign sales in this industry.
The loss of competitiveness due to costs, infrastructure backlog and delays in proceedings are forcing public sector companies to reduce their production and staff numbers.
The structural problems affecting the manufacturing sector explain the increasing shrinkage of Costa Rica's actual production. The lack of solutions to key issues affecting the productivity of Costa Rican industry is resulting in lower production and consequently less job creation.
Loss of competitiveness in the region has been a constant factor in recent years due to problems in infrastructure, transportation and energy costs.
Although the sector's exports to Central America have maintained a relatively stable rate of growth, entrepreneurs say their products have lost competitiveness against the food industries in neighboring countries, due to the high costs of energy, transportation and infrastructure.
The presidential candidate Luis Guillermo Solis announced he will strengthen intraregional trade if he wins on April 6th.
In a meeting with representatives from the Costa Rican Chamber of Food Industry (Cacia), Luis Guillermo Solís, presidential candidate of the Citizen Action Party, said that a new government would strengthen trade with Central America and the Caribbean.
Technical regulations on the "General Principles of Good Food Manufacturing Practices" have been updated.
In December 2013, the Institute of Technical Standards of Costa Rica (Inteco) updated and approved a tool which establishes the controls and requirements for all processes in the food manufacturing chain.
From a press release issued by the Institute of Technical Standards of Costa Rica (Inteco):
The nation's most important industry sees its presence in the market threatened by the increasing loss of competitiveness of the Costa Rican economy.
From a press release by the Costa Rican Chamber of Food Industry (CACIA):
Mediocrity in Competitiveness Issues Suffocates Food Industry
• Costa Rica is ranked 97th among 148 countries in terms of infrastructure and 129 in the number of procedures required to start a business, according to world rankings.
The virtual tie in the polls of candidates from the left, center and right is causing concern among employers.
With less than three weeks to go before the elections for the Presidency and Members of the Legislative Assembly, a poll has shown there is a tie for the top position, according to voter intentions, out of the three parties with distinct government programs, generating uncertainty about the changes to the business environment which could occur during the next term of government in the country.
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